Neil Owen Turner v Royal Bank of Scotland
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ALDOUS,LORD JUSTICE CHADWICK,LORD JUSTICE BUXTON |
| Judgment Date | 30 June 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0630-8 |
| Docket Number | B3/1999/1146 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 June 2000 |
[2000] EWCA Civ J0630-8
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(IN BANKRUPTCY)
(Mr George Laurence
(sitting as a deputy High Court judge))
Royal Courts of Justice
Strand
London WC2
lord Justice Aldous
Lord Justice Chadwick
Lord Justice Buxton
B3/1999/1146
THE APPLICANT appeared on his own behalf
MR A MALEK and MR J MARK PHILLIPS (Instructed by Messrs Pannone & Partners, Manchester M3 2BU) appeared on behalf of the Respondent
: Lord Justice Chadwick will give the first judgment.
: By an order made in the Bankruptcy Registry of the High Court on 11 June 1997, the appellant, Mr Neil Turner, was adjudicated bankrupt on the petition of the respondent, Royal Bank of Scotland Plc ("the Bank"). Mr Turner appealed against that order to a single Judge of the High Court, pursuant to section 375(2) of the Insolvency Act 1986. That appeal was heard by Mr George Laurence QC, sitting as a Deputy Judge in the Chancery Division. By an order made on 21 November 1997 the Judge dismissed that appeal. By a further order, made on 12 February 1998, Sir John Vinelott, sitting as a Judge of the High Court, refused an application to stay all proceedings under the bankruptcy order. Mr Turner now appeals to this Court against the orders of 21 November 1997 and 12 February 1998. He does so with the permission of this Court (Brooke and Robert Walker LJJ) granted on 16 July 1999. In the meantime, of course, Mr Turner has been discharged from his bankruptcy by the automatic provisions under section 279(1) of the 1986 Act.
The petition on which the bankruptcy order was made was presented to the Bournemouth County Court on 13 September 1996. The petition is based on judgment debt in the amount of £15,925.29, with interest since judgment of £817.50; a total of £16,742.79. The judgment was obtained by the Bank on 13 November 1992, under Order 14 of the Rules of the Supreme Court 1965, in proceedings commenced in the Manchester District Registry of the Queen's Bench Division, as long ago as 20 November 1987.
The claim on which the Bank obtained summary judgment in the Queen's Bench proceedings was for monies said to be owing by Mr Turner to the Bank on two overdrawn accounts. As at 16 November 1987 the amount owing was £8,277.78; but interest was accruing, at the rate of 24% per annum on the one account, and at the rate of 7% per annum above the Bank's base rate on the other account. The effect of interest at the rates charged was that by the time the Bank obtained summary judgment, some five years later, the amount of the indebtedness had more than doubled. Mr Turner's appeal against the judgment was dismissed by Alliott J in January 1993.
As appears on the face of the petition, it was preceded by the service of a statutory demand. The statutory demand was served under section 268(1)(a) of the Insolvency Act 1986. It contains particulars of the original debt, the judgment, and the claim for interest after judgment, at the relatively more modest rate of 15% per annum. Mr Turner applied, under Rule 6.4 of the Insolvency Rules 1986, to set aside the statutory demand. That application was made to the Bournemouth County Court. It was dismissed on 30 April 1993 by the District Judge. Mr Turner appealed to the High Court. That appeal was heard by Knox J. On 24 February 1994 Knox J set aside the order made on 30 April 1993, and remitted the matter to the Bournemouth County Court for rehearing.
There were, I think, five further hearings of the application to set aside the statutory demand, over a period from 5 September 1994 to 31 May 1995. Eventually, on 31 May 1995, the District Judge at Bournemouth dismissed the application for a second time. Mr Turner appealed against that order. He contended that he had a cross-claim against the Bank for an amount in excess of the judgment debt and interest.
That appeal was heard by His Honour Judge Colyer QC sitting as a Judge of the High Court. By an order dated 5 October 1995 the appeal was dismissed. Mr Turner sought the leave of this court to appeal against that order. Leave to appeal was refused by this court (Auld and Thorpe LJJ) on 28 June 1996. In the course of refusing leave, Auld LJ said this:
"Judge Colyer examined the basis of the cross-claim. He considered such relevant authorities as there are. He took the view that, whether it amounted to a counterclaim equalling or exceeding the amount of the statutory debt, its legal basis and Mr Turner's quantification of it were highly insecure. He said that the claim had little or no chance of success in substance, and that at best all Mr Turner could hope for would be nominal damages. It therefore did not appear to him that Mr Turner had a counterclaim which qualified under rule 6.5 paragraph 4 of the Insolvency Rules. Mr Turner complains that the judge's treatment of the matter amounted to an effective trial of his claim against the bank without all the material that a court trying such a claim would need, thus pre-empting the action in the Southampton County Court.
It seems to me that the judge has to take a view under this rule, if it is to be given any effect, both on potential claims in another court and those in being. The rule contemplates that. The judge did so here —having thoroughly considered the matter. In my view he was entitled to conclude, as he did, that Mr Turner did not have a counterclaim which qualified within the meaning of the rule."
As appears from that passage, Mr Turner had commenced proceedings against the Bank on his cross-claim in the Southampton County Court. He did so on 18 September 1995. The proceedings are listed under case reference SO 507720. In those proceedings Mr Turner asserted that the Bank had (in 1986, 1987 and 1988) disclosed information about his affairs to National Westminster Bank Plc which was misleading, malicious and false; with the intention that such information would injure him. He claimed, first, damages for breach of the Bank's contractual duty of confidence; and second, damages in tort for a breach of a duty of care "not to knowingly or recklessly injure the plaintiff's commercial interests". Subsequently, Mr Turner added a claim in conspiracy, based on the assertion that the Bank had agreed with other bankers to ignore obligations of confidentiality and to pass confidential information about their customers to credit information agencies. He put the amount of the damages which he had suffered at £567,000. Subsequently, he has increased the amount of that claim to a figure which is a little over £16 million.
As appears from the Defence to that claim, put in by the Bank, the information supplied by the Bank to National Westminster Bank Plc consisted of four responses to requests for references. These responses were (a) on 19 March 1986 "if you refer to NMT [meaning Mr Turner] considered respectable and trustworthy, but from the figures available to us his resources would appear to be fully committed at present"; (b) on 11 March 1987 "unable to speak for your enquiry"; (c) on 18 March 1987 "we are not in a position to speak for this enquiry"; and (d) on 6 September 1988 "we are unable to speak for your figure and purpose. We advise caution in your dealings".
It was in those circumstances that on 13 September 1996, some nine years after proceedings had first been commenced to obtain payment of monies due on overdrawn accounts, the Bank was in a position to present a petition for bankruptcy.
Rule 6.21 of the Insolvency Rules 1986, provides that where a debtor intends to oppose a petition for a bankruptcy order, he shall file in Court a notice specifying the grounds on which he will object to the making of that order. Mr Turner's notice, under Rule 6.21, dated December 1996, set out three grounds of opposition: (i) that he was not indebted in the sum claimed "by way of extinguishment"; (ii) also, and in the alternative, that an offer had been made and unreasonably refused; and (iii) also, and in the alternative, that he was able to pay the sum claimed if its Bank released its ambiguous claim for security.
On 18 November 1996 the petition was transferred from the Bournemouth County Court to the Bankruptcy Registry in the High Court. It came before a Deputy Registrar Scott for hearing on 11 June 1997. Mr Turner did not appear on that hearing. The Deputy Registrar decided to proceed in his absence. He had before him Mr Turner's notice of opposition. Nevertheless, the Deputy Registrar thought it right to make the bankruptcy order sought.
Mr Turner appealed. The grounds of appeal in the Notice of Appeal, dated 4 July 1997, included the contention that the Deputy Registrar should not have proceeded to hear the appeal, in the circumstances that there were medical certificates before him which had shown that Mr Turner was too ill to attend at that hearing. But paragraph 3 of that Notice of Appeal contained the following ground:
"That having regard to all points raised in the applications and evidence on the court file by the debtor, the learned Registrar should have dismissed the petition."
Mr Turner's appeal against the bankruptcy order came before Mr Laurence QC in November. In a full and careful judgment (extending over 83 pages) Mr Laurence addressed, first, the question whether the Deputy Registrar had been wrong to proceed, as he did, to hear the petition in the absence of Mr Turner. He concluded that the medical evidence which had been before the Deputy Registrar ought to have led him to grant...
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